Hi all,

I made an offer on a short sale and it was accepted by the seller but pending bank approval. One of the key buying points was the basement. It was partially finished living area and finished bathroom. The seller provided me the seller's property disclosure document and it asks the seller if any additions or improvements made. They answered No. The other question was building codes or city or county violations = No. Obviously when I saw the basement I knew it was an improvement.

The build date on the house is 2004. 3300 square foot not including basement of 1500. Denver

My real estate agent called the city county zoning and they said they don't have any permits on file for this house. Looking at the tax assessed value, it does not include the finished basement. When we asked the seller and their real estate agent they said they bought the house that way. There are 2 rooms that are unfinished. Just a living area and bathroom finished.

I called a couple inspectors and both told me that they don't know the exact codes for that part of town, what they can do is see if it was well built.

Now I know a lot of people have improvements on home and don't get permits due to tax increases.

My questions are:
1 - What should I do?
2 - How do I get the permits? What is needed?
3 - Will the city impose some fine on me without having a permit?
4 - Does the city have to pass it or inspect it?
5 - If I don't get it passed, what problems can I expect?
6 - Will insurance cover damages in case anything happens in the basement?

I would appreciate any advise you may have from your experiences.

TIA